Budget 2006: Smaller firms get bit of a breather

The Government will give businesses up to $10 a week to help with the expense of managing payrolls.

The Budget pledges $79.4 million over four years to subsidise employers' use of payroll agents, doled out at a flat rate of $2 per pay period, per employee for up to five workers.

The initiative is part of the Government's campaign to simplify tax and reduce business compliance costs. It aims to reduce the workload for small businesses by helping outsource the duty, which can include deducting child support and student loan payments from staff wages.

The assistance is welcome news for Karen Murrell, general manager of growing skin care company Skinfood.

Her staff grew to four in the last year, a huge transition made easier by outsourcing payroll, she said.

"When your business is growing, it's hard to find time for everything," said Murrell. "It's a help that you probably wouldn't get if you were somewhere else."

Miranda Brown, of clothing label Miranda Brown, pays her five part-time staff herself with online banking, so will not receive the benefit.

"I'm puzzled that that is the area they've cited to help to assist," she said. "Provisional tax is really challenging when you are growing. You need all the money that you have to grow your business."

Deloitte partner growth solutions Keith McArley said the Budget offered little help to small and medium-sized businesses. The subsidy helped with tax compliance, such as monthly PAYE, but did not address "non-financial compliance" such as health and safety. "There's a lot of hoops small business have to jump through."

Paying agents

* $79.4 million over four years to subsidise employers' use of payroll agents.

* Subsidy is a flat rate of $2 per pay period, per employee for up to five workers.

* It aims to reduce the workload for small businesses by helping outsource the duty.